In a recent judgment in the case of Roshanara Ebrahim v Ashleys Kenya Limited & 3 others [2016] eKLR, the High Court considered a petition filed by Ebrahim who was crowned Miss World Kenya 2015 and subsequently dethroned based on nude photographs of her allegedly given to the Miss World Kenya organisers by Ebrahim’s boyfriend. Aggrieved by the decision to dethrone her, Ebrahim sued Ashleys Kenya which is the organiser and franchise holder of Miss World Kenya from the Global Miss World pageant, Ashleys Kenya Chief Executive Officer (CEO), Ms. Terry Mungai along with her said boyfriend, Mr. Frank Zahiten and the First Runner-up Ms. Evelyne Njambi, who was enthroned as Miss World Kenya following the dethronement of Ebrahim.

‘Freedom to think as you will and to speak as you think are means indispensable to the discovery and spread of political truth’ Justice Louis Brandeis in Whitney v California (1927)

Free speech has previously been defined as the ‘right to defiantly, robustly and irreverently speak one’s mind just because it is one’s mind.’ It is one of the fundamental characteristics of a functional democracy. In the internet age, free speech translates to internet freedom, ability to put down one’s thoughts freely on the internet systems in order to pass information to the greatest number of people possible, without interference.
Well, trickling down to Kenya’s democratic scene, it is safe to conclude that ours is a partial democracy- fundamental rights such as the freedom of expression are continuously curtailed through a myriad of oppressive laws; and while it is correct to say that bloggers and social media opinion makers should protect this right, it is also true that ignorance of the law is not a defence and that hash tags will not release our favorite bloggers from prison- knowledge of the law will!
This post serves to create awareness on internet related offences that any social media user should be wary of.

It all started with this twitter hashtag. Actually, no – one might want to start from an earlier point in time. On February 20th 1984 a local newspaper published an article titled: “Musicians Complain of Royalties” where it was reported that musicians who were members of the then Musicians Performing Rights Society of Kenya (MPRSK) had complained that the license fees collected on their behalf by MPRSK under a pre-existing collaboration agreement with the Performers Rights Society (PRS) in London were not being paid out to MPRSK members. On March 1st 1984, Mr. S.N. Ndemange the then MCSK General Manager wrote a letter captioned “Royalty Payment” addressed to Mr. Habel Mwalumba Kifoto, one of the complaining musicians mentioned in the newspaper article, explaining that the functions of MPRSK had since been taken over by MCSK, a duly registered company limited by guarantee incorporated a year prior in 1983, that would serve as the national society of composers, authors and publishers of musical works. Shortly after, Kifoto joined MCSK as a member and later rose up the ranks to become the Chairman of the Board of Directors at MCSK, a seat he occupied until his untimely demise on July 31st 2011.

On this subject of well known marks, this blogger invites readers to listen to audio recordings of the presentations made by KIPI trade mark examiners during a workshop held in January 2014 available here. Readers may also wish to download Caroline Muchiri, Advocate’s powerpoint presentation made in February 2014 available here.

Below are my reactions (in bold) to some of the issues addressed in Caroline’s presentation:
Well Known Marks [Perhaps most texts refer to them as “Well Known Marks” because it includes both Trade and Service Marks] are those marks that are considered to have gained reputation through their use in the market. [Which market or sector of the market is relevant?]

As a result of this reputation, well known marks enjoy some level of protection whether or not they are registered. Some well known marks are usually accompanied by registration in the respective jurisdiction where protection is being sought [When registration in all 45 classes is not possible, KIPI has made the case that owners of well-known marks would do well to register them as defensive marks in classes within which they do not trade.]

The question of ‘wellknownness’ of a mark usually arises when there are disputes for instance upon registration of a similar mark by a third party or infringement. It does not arise when examining the mark as to its registrability. [This is interesting. Therefore no special treatment for well known marks seeking registration within Kenya.]
This is usually a claim of protection of an unregistered mark put forth by an owner of a mark when opposing expunging the registration of a similar or identical mark or even in infringement proceedings; [However does this mean that the “‘wellknownness’ of a mark” cannot be a relative ground for refusal of registration of a mark during examination?]

The law on well known trademarks is traced back to the Paris Convention on Protection of Industrial property; Article 6 bis provides for the protection of well known marks by obligating the countries of the Union to afford the highest level of protection to well known marks either on request of an interested party or through its own legislation. [For those who have often wondered what Bis means, it means means twice or repeat. Art. 6 bis is simply an article inserted in the code between Articles 6 and 7. Bis would only be used if there was already an Art. 6.]

The protection under article 6bis is hinged on the following requirements:-
– The mark must be considered by a competent authority of the country of registration or of use, to be a well known mark;
– The interested party must be a person entitled to the benefits of the convention;
– The mark must be used for similar goods. [and disimilar goods too, in some instances?]

Before 2002, Kenya did not have provisions on the protection of well known trademarks. The operative law was derived from TRIPS; In the matter of trademark applications number 43283—4 N’ ICE (word) in the name of Beta Health Care International Limited and the opposition thereto by Smithkline Beecham, (1998), the registrar recognized that despite the absence of laws in Kenya protecting well known marks, the registrar had a duty to refuse the registration of marks that are reasonably well known and used in other countries. This is so, even when the interested party does not have a registered trademark. [ It is hoped that local traders will learn from Beta not to “lift” foreign marks that are well-known in the market and purport to register them in Kenya!]

Section 15A (2) allows an owner of a well known mark to obtain injunction to restrain the use and registration of a similar mark subject to section 38B; Under the Act there is no section 38B and it can only be inferred that the Parliament meant section 36B which is a statutory estoppel to claimant;[It is surprising that this error has not been corrected. Has KIPI made any efforts address this issue?]

In 1999, the General Assemblies of the Paris Union and WIPO adopted some Joint Recommendations concerning provisions on the protection of well-known marks which provides a guide as to the test to be administered to a mark before the well known status can be conferred; [If these Recommendations are not binding on member states, then our courts can disregard them? How has our jurisdiction treated them?]

a.The degree of knowledge or recognition of the mark in the relevant sector of the public; For instance, smokers, beer drinkers, car dealers are usually treated as consumers who are knowledgeable as opposed to a ‘Mama Mboga’. In the British American Tobacco Kenya vs Cut Tobacco Kenya Limited (2001) [It seems that most of the issues that have arisen around well-known marks appears to be in the alcoholic beverages and tobacco industries. This must be an indication that competition in those industries are exceptionally high. What then would be the effect of a plain-packing legislation as in Australia?]

d. The duration and geographical area of any registrations and or any applications for registration of the mark. [In this regard, reference can be made to the Beta case discussed above where Smithkline were able to show that they had registered their mark in several other jurisdictions.]

e. The record of successful enforcement of rights in the mark, in particular the extent to which the mark has been recognized as a well known mark by other competent authorities; [In the Red Bull vs Bulzai Energy Drink case, the opponents were able to show that they had successfully opposed the registration in other jurisdictions such as New Zealand, Turkey, Croatia, Colombia and the EU.]

The International Trademark Association (INTA), has also developed some guidelines on the test to be applied when determining whether or not a mark is well known; These guidelines are commonly referred to INTA’s Resolution of Well Known Marks; [It is interesting to note that none of the trade mark examiners at KIPI mentioned the INTA Guidelines in their presentations during the KIPI workshop in January 2014. Could it be that the INTA Guidelines are more preferred among trade mark litigators?]

INTA endorses the following criteria for consideration before a mark can be said to be a well known mark:-
a. The amount of local or worldwide recognition of the mark; [The reference to “local” recognition is a significant departure from the Joint WIPO Recommendations. This reference may be of great use when attempting to establish intra-member state well-knowness as opposed to inter-member state well-knowness, if that makes any sense?]

b. The degree of inherent or acquired distinctiveness of the mark; [The Chief Trade Mark Examiner at KIPI has come up with a “distinctiveness continuum” which I believe summarises this requirement quite well. See below.]

c. The local or worldwide duration of use and advertising of the mark. [Indeed, the duration matters!]

d. The local or worldwide commercial value attributed to the mark; [Locally, the question of IP valuation remains pertinent]

COMMENTARY
There is also reference to co-existence of marks. Where a mark has coexisted with another similar mark e.g. Panadol and Sonadol in Kenya, neither of the owners can claim to be entitled to protection of their mark as a well known mark in another jurisdiction as against one another or a third party incorporating a similar mark like ‘Betadol’ [Glaxo-Smithkline dropped the ball on this one. The Sonadol registration ought to have been opposed.]

The test of well known marks has been applied in Kenya in several matters including:-
Unilever Plc Vs Emami Limited on Fair & Lovely and Fair & Handsome. In part of her decision and in ruling that Fair and Lovely was not a well known mark in Kenya. [The Registrar appears to be leaning more towards the INTA Recommendations in this ruling]

Conclusion

There are few marks that would qualify to be protected as well known. They would include Locally-Jogoo for maize flour, Safaricom; M-Pesa [An interesting discussion has arisen on whether the mark “M-Pesa” was registrable at all. Proponents of this line of reasoning argue that the mark M-Pesa is descriptive therefore its application ought to have been refused on the basis it had not acquired distinctiveness. However the majority view was that M-Pesa was registrable, especially where the applicant i.e. Safaricom disclaims the words “M” and “Pesa”. This blogger has dug up the advertisement of the M-Pesa mark in the Industrial Property Journal. See below. Therefore any person would be free to register the word mark “Mobile Money” without Safaricom claiming that such a registration infringes on its well-known mark, on condition that such applicant disclaims the words “Mobile” and “Money”.

Therefore Safaricom clearly cannot claim exclusive rights over the words “m” and “pesa”, however Safaricom can bar any attempt to register the use of the two words as a word mark. In addition, any attempts to register word marks that use the word m and other words with a similar meaning to the Swahili word “pesa” could also be successfully opposed by Safaricom.]

“What is goodwill? It is a thing very easy to describe, very difficult to define. It is the benefit and advantage of good name, reputation, and connection of a business. It is the attractive force which brings in custom. It is the one thing which distinguishes an old-established business from a new business at its first start. Goodwill is composed of a variety of elements. It differs in its composition in different trades and in different businesses in the same trade (….) The goodwill of a business is one whole.” – Lord MacNaughten in The Commissioners of Inland Revenue v Muller & Co’s Margarine Limited [1901] AC 217 223-224.

According to a recent Consumer Insight survey, Ariel by Procter & Gamble East Africa (PGEA) enjoys a market share of 25 per cent, Omo by Unilever Kenya (UK) is at 18 per cent, Sunlight also manufactured by UK is at 17 per cent, Toss by Kapa Oil Refineries is at 6 per cent and Ushindi by PZ Cussons is at 6 per cent. According to this survey, despite Ariel’s re-entry into the Kenyan market, it has become “the leading brand” and has “successfully captured a loyal following” thanks to it’s Enzymax formula and ‘one wash’ campaign which has really “connected with consumers”.

The Business Daily now reports that PGEA has been sued by UK with respect to its “one wash” detergent advertising campaign for Ariel which the Omo manufacturer alleges is non-factual. The adverts in question (an earlier version of which is available above in Swahili) promote Ariel as the best stain removal detergent “in one wash” and is compared as a superior choice to the “other popular powder detergent in the market” (an alleged reference to UK’s Omo detergent). UK contends that the adverts thus depict Omo as incapable of removing the stains in “one wash”, arguing that the claim is not based on any independent research. Therefore UK alleges that PGEA’s ‘one wash’ advertisements are unlawful. From an intellectual property (IP) perspective, advertisements are important mode of building and promoting IP rights.

The High Court last month granted UK interim orders restraining PGEA from “running or airing the Ariel One Wash campaign advert in its current form at all media houses and all forms of print and electronic media” until the matter is back in court. Subsequently, it was reported that the court directed that the suit be referred to a Tribunal of the Advertising Standards Board of Kenya.

Comment:

The central question which arises in the present case is whether one manufacturer may compare its product in an advertisement with that of his competitor and indicate that its product is better or that there are defects in its competitor’s products.

This practice is known as comparative advertising.

According to Prof Owen Dean, IP Chair at Stellenbosch University, a trader who resorts to comparative advertising is “attempting to “ride on the back” of a well known and successful product and to use the repute of that product as a platform from which to generate sales of his own product.”

Kenya has a broad framework of national and international legal frameworks that have a direct impact on the regulation of comparative advertising. First and foremost, the Paris Convention, signed and ratified by Kenya, contains important provisions on competition. Article 10bis reads as follows:

“(1) The countries of the Union are bound to assure to nationals of such countries effective protection against unfair competition.
(2) Any act of competition contrary to honest practices in industrial or commercial matters constitutes an act of unfair competition.
(3) The following in particular shall be prohibited:
– false allegations in the course of trade of such a nature as to discredit the establishment, the goods or the industrial activities of a competitor;
– indications or allegations the use of which in the course of trade is liable to mislead the public as to the nature, the manufacturing process, the characteristics, the suitability for their purpose, or the quality, of the goods.”

In addition Article 2 of the TRIPs Agreement requires members of the WTO to comply with the substantive provision of the Paris Convention as highlighted above.

Nationally, comparative advertising is regulated through common law and statute.
Kenya’s principal legislation governing false or misleading advertising is the Competition Act. For our present purposes, it is important to note the definition of asset in this Act which includes both “asset” includes both “intellectual property” and “goodwill”.

Most notably, section 55 of the Act makes it an offence to engage in false or misleading advertising. The section reads as follows:

“55. False or misleading representations
A person commits an offence when, in trade in connection with the supply or possible supply of goods or services or in connection with the promotion by any means of the supply or use of goods or services, he―
(a) falsely represents that—
(i) goods are of a particular standard, quality, value, grade, composition, style or model or have had a particular history or particular previous use;
(ii) services are of a particular standard, quality, value or grade;
(iii) goods are new;
(iv) a particular person has agreed to acquire goods or services;
v) goods or services have sponsorship, approval, performance characteristics, accessories, uses or benefits they do not have;
(vi) the product has a sponsorship, approval or affiliation it does not have;
(b) makes a false or misleading representation—
(i) with respect to the price of goods or services;
(ii) concerning the availability of facilities for the repair of goods or of spare parts for goods;
(iii) concerning the place of origin of goods;
(iv) concerning the need for any goods or services; or
(v) concerning the existence, exclusion or effect of any condition, warranty, guarantee, right or remedy.”

In common law, the torts of passing off and injurious falsehood relate to forms of conduct which constitute an infringement of a competitor’s right to attract custom whose object is the trader’s goodwill. The common law action of passing off is expressly recognised in section 5 of the Trademarks Act. Whereas the common law tort of injurious falsehood seems to have received tacit recognition in section 6 of the Trade Descriptions Act which states as follows:

“6. (1) It shall be an offence for any person, in the course of any trade-
(a) to make a statement which he knows to be false; or
(b) recklessly to make a statement which is false, as to any of the following matters-
(i) the provision in the course of any trade of any services, accommodation or facilities;
(ii) the nature of any services, accommodation or facilities provided in the course of any trade;
(….)
(2) For the purposes of this section-
(a) anything(whether or not a statement as to any of the matters specified in subsection (1)) likely to be taken for such a statement as to any of those matters as would be false shall be deemed to be a false statement as to that matter; and
(b) a statement made regardless of whether it is true or false shall be deemed to be made recklessly, whether or not the person making it had reasons for believing that it might be false.”

Thus far, it appears that the relevant law cited is in favour of UK’s claim of false, misleading advertising. However PGEA may seek to refute UK’s claims by relying on South African case law as well as the Constitution of Kenya, 2010.

In South Africa, the question of comparative advertising arose in the case of Post Newspapers (Pty) Ltd v World Printing & Publishing Co Ltd 1970 where both parties were publishers of two newspapers – Post and The World. Both papers targeted the same potential readership and so they competed for advertising. Under the cover of a circular letter, the respondent sent a market review to some advertising agents. In it, Post was unfavourably compared with The World as an advertising medium. The applicant sought an interdict prohibiting the dispatch of those documents. Nicholas J referred with approval to some English cases, in which it had been said: “The general position in law is: comparison – yes; but disparagement – no.”

In refusing the application, the court held that:

“To the extent that the statements complained of involved merely a comparison of The World and Post, they are not actionable. There are, however, statement which amount to a disparagement of Post as an advertising medium. If these statements were shown prima facie to be untrue, the applicant would be entitled to relief. The applicant does not, however, say that these statements are untrue, nor is there any evidence that they are untrue.”

Therefore in terms of South African case law, purely comparative advertising is not unlawful – unlawfulness only occurs if the competitor is discredited by untrue allegations. This precedent would bolster PGEA’s case against UK. However South African scholars in the law of torts, Van Heerden & Neethling disagree with the holding in this case. They argue that comparative advertising always entails a disparagement of a competitor’s goods and therefore it constitutes an impairment of the latter’s goodwill and it is unlawful unless there are grounds for justification.

Aside from reliance on South African precedent, the makers of Ariel may chose to focus on the protection of intellectual property rights expressly guaranteed under the Constitution. In this connection, counsel for PGEA would argue that the state must balance consumer rights (Article 46) as advanced by UK together with the IP rights of PGEA in its advertisements (Article 40). Connected to this right to property is PGEA’s constitutional right to freedom of expression which is also enshrined in Article 32.

This blogger has previously discussed here and here the various intellectual property rights that may be owned within the context of advertising, most notably copyright in all literary, artistic and audio-visual works and trademark rights with respect to brand names, logos and slogans. In this regard, it is important to note that UK has not disputed PGEA’s IP rights relating to the adverts. Therefore by ordering that the Ariel ‘One Wash’ adverts be removed from media circulation, it may be argued that the courts have infringed on PGEA’s IP rights in the adverts. Article 40(5) compels the courts to support, promote and protect the IP rights of the people of Kenya. Any limitation of rights under the Constitution must be justified under Article 24 of the Constitution. PGEA would also argue that the restraining order by the court is a deprivation of property and therefore would have to comply with Article 40(3) of the Constitution.

1. The court denied Faulu Kenya’s request that Safaricom be barred from any dealings in the M-Shwari service until the former’s case is heard and determined.
2. The court rejected Safaricom’s bid to have Faulu Kenya’s bid moved to the Industrial Property Tribunal and stated that it had jurisdiction to hear and determine the case.

To recap, Faulu Kenya filed a lawsuit last week in the Kenyan High Court seeking to halt Safaricom from operating M-shwari, arguing that it is similar to its Kopa Chapaa service, which has been in operation since last year in partnership with Indian mobile operator Airtel Kenya. Faulu Kenya claimed that it had pitched to Safaricom the idea of a mobile money service that allows users to save, borrow loans and earn interest using their mobile phones.

During this pitch, Faulu Kenya alleges that it presented to Safaricom a prepared concept paper detailing how the platform was going to operate. Faulu Kenya also claims that it entered into a non-disclosure agreement with Safaricom, which it claims that Safaricom disregarded when it developed and launched the M-Shwari product. However Safaricom now claims that it had knowledge of a similar product to Faulu Kenya’s, having signed a pact with Commercial Bank of Africa (CBA) eight days before the Faulu agreement.

Safaricom has made a lengthy statement on this matter via their official site, which reads in part:

“While this matter is already in court and is therefore subject to sub judice rules, Safaricom Ltd seeks to clarify that M-Shwari is a proprietary product of Safaricom Limited which is the successful result of a 2-year product development process.

As you are aware, Safaricom Ltd has had a strong focus on Financial Inclusivity since 2007, when it launched M-Pesa. The commitment has been sustained through relevant enhancements informed by proactive research into user habits, dynamic customer needs and emerging trends, relating to the use of M-Pesa and other mobile finance solutions.

In developing M-Shwari, Safaricom Ltd and the Commercial Bank of Africa followed the due legal process as required by the Laws of Kenya.

As Kenya’s leading integrated communications company, Safaricom has consistently worked hard to conceptually develop innovative solutions for all Kenyans. As a result Safaricom has built an enviable intellectual property portfolio.

While the allegations are lamentable and unfortunate, Safaricom will seek to have the matter resolved through the right legal processes. We believe that this law suit is tainted with malice because it is founded on untrue allegations(…)”

Fortunately, the learned judge, Mr. Jonathan Havelock did not fall into the trap of his learned sister Lady Justice Joyce Khaminwa, who was persuaded by Safaricom to make a ruling in the M-Pesa litigation that the High Court had no jurisdiction to handle the matter directing that the litigant Mr Christopher Ondieki ought to file his suit at the Industrial Property Tribunal.

This blogger submits that if this litigation proceeds to its full conclusion, Hon. Justice Mr. Jonathan Havelock will have the rare opportunity to, once and for all, provide Kenya with useful jurisprudence on the nature and scope of intellectual property protection, with a clear emphasis on the copyrightability of mobile-based ICT innovations, the oft-misunderstood idea/expression dichotomy and perhaps the patentability of M-products generally.

This may also be a worthwhile opportunity for the learned judge to examine both M-Shwari and Kopa Chapaa and determine whether both products can co-exist in the market bearing in mind Kenya’s new laws on competition and the alleged existence of a non-disclosure agreement signed by both Safaricom and Faulu Kenya.

All in all, this is a case that we will all be following keenly as it now proceeds to the hearing stage.